diff --git a/apps/api/src/router.ts b/apps/api/src/router.ts
index 963a533..0f515aa 100644
--- a/apps/api/src/router.ts
+++ b/apps/api/src/router.ts
@@ -137,6 +137,7 @@ import {
   releaseSpaceDeletionClaim,
   renewSpaceDeletionClaim,
   requireMembership,
+  resolveProjectWorkspaceDirectory,
   SPACE_DELETION_CLAIM_TIMEOUT_MS,
   SpaceDeletionInProgressError,
   SpaceLimitError,
@@ -573,6 +574,18 @@ export function createRouter(deps: RouterDeps) {
         if (input.workspacePath && !context.actor.isDeploymentOwner) {
           throw new ORPCError("FORBIDDEN");
         }
+        // Check the folder before the space exists, so a bad path leaves no space behind.
+        let workspacePath: string | null = null;
+        if (input.workspacePath) {
+          try {
+            workspacePath = await resolveProjectWorkspaceDirectory(input.workspacePath);
+          } catch (error) {
+            if (error instanceof InvalidProjectWorkspacePathError) {
+              throw new ORPCError("BAD_REQUEST", { message: error.message });
+            }
+            throw error;
+          }
+        }
         let space: { id: string; name: string };
         try {
           space = await createSpaceForMember(deps.prisma, {
@@ -586,20 +599,9 @@ export function createRouter(deps: RouterDeps) {
           }
           throw error;
         }
-        let workspace = null;
-        if (input.workspacePath) {
-          try {
-            workspace = await wireProjectWorkspace(deps.prisma, {
-              spaceId: space.id,
-              workspacePath: input.workspacePath,
-            });
-          } catch (error) {
-            if (error instanceof InvalidProjectWorkspacePathError) {
-              throw new ORPCError("BAD_REQUEST", { message: error.message });
-            }
-            throw error;
-          }
-        }
+        const workspace = workspacePath
+          ? await wireProjectWorkspace(deps.prisma, { spaceId: space.id, workspacePath })
+          : null;
         return {
           id: space.id,
           name: space.name,
diff --git a/packages/db/src/project-workspace.test.ts b/packages/db/src/project-workspace.test.ts
index 75f0693..1a20e8c 100644
--- a/packages/db/src/project-workspace.test.ts
+++ b/packages/db/src/project-workspace.test.ts
@@ -72,7 +72,7 @@ describe("project workspace wiring", () => {
 
     const wired = await wireProjectWorkspace(prisma as unknown as Pick<PrismaClient, "space">, {
       spaceId: "space-1",
-      workspacePath: root,
+      workspacePath: await resolveProjectWorkspaceDirectory(root),
     });
     expect(wired.path).toBe(realpathSync(root));
     expect(wired.git).toEqual({
diff --git a/packages/db/src/project-workspace.ts b/packages/db/src/project-workspace.ts
index 50b3c5f..fd0c04a 100644
--- a/packages/db/src/project-workspace.ts
+++ b/packages/db/src/project-workspace.ts
@@ -50,18 +50,17 @@ export interface WiredProjectWorkspace {
   } | null;
 }
 
-/** Persist a host folder and optional git metadata on a newly created space. */
+/** Persist a folder from `resolveProjectWorkspaceDirectory`, and its git metadata, on a new space. */
 export async function wireProjectWorkspace(
   prisma: Pick<PrismaClient, "space">,
   input: { spaceId: string; workspacePath: string },
 ): Promise<WiredProjectWorkspace> {
-  const resolved = await resolveProjectWorkspaceDirectory(input.workspacePath);
-  const git = await readGitCheckout(resolved);
+  const git = await readGitCheckout(input.workspacePath);
 
   await prisma.space.update({
     where: { id: input.spaceId },
     data: {
-      workspacePath: resolved,
+      workspacePath: input.workspacePath,
       gitRemoteUrl: git.present && git.remoteUrl ? git.remoteUrl : null,
       gitDefaultBranch: git.present && git.defaultBranch ? git.defaultBranch : null,
       gitHeadCommit: git.present ? git.headCommit : null,
@@ -69,7 +68,7 @@ export async function wireProjectWorkspace(
   });
 
   return {
-    path: resolved,
+    path: input.workspacePath,
     git:
       git.present && git.remoteUrl && git.defaultBranch
         ? {
diff --git a/packages/testkit/src/authorization.test.ts b/packages/testkit/src/authorization.test.ts
index ff9020c..ddd0059 100644
--- a/packages/testkit/src/authorization.test.ts
+++ b/packages/testkit/src/authorization.test.ts
@@ -2239,15 +2239,25 @@ describeWithDatabase("API authorization and resource isolation", () => {
       const legacyNavigation = await rpc<SpaceNavigation>(app, member, "spaces/list");
       expect(legacyNavigation.spaces.find((space) => space.id === legacy.id)?.workspace).toBeNull();
 
+      // A bad folder is rejected before the project exists, so fixing it and retrying leaves one.
+      for (const badPath of [path.join(hostFolder, "missing"), path.join(hostFolder, ".env")]) {
+        const rejected = await raw(app, owner, "spaces/create", {
+          name: "Owner folder",
+          workspacePath: badPath,
+        });
+        expect(rejected.status, badPath).toBe(400);
+      }
       const linked = await rpc<Space>(app, owner, "spaces/create", {
         name: "Owner folder",
         workspacePath: hostFolder,
       });
       expect(linked.workspace?.path).toBe(hostFolder);
       const ownerNavigation = await rpc<SpaceNavigation>(app, owner, "spaces/list");
-      expect(ownerNavigation.spaces.find((space) => space.id === linked.id)?.workspace?.path).toBe(
-        hostFolder,
-      );
+      expect(
+        ownerNavigation.spaces
+          .filter((space) => space.name === "Owner folder")
+          .map((space) => space.workspace?.path),
+      ).toEqual([hostFolder]);
       const ownerBot = await rpc<Bot>(
         app,
         owner,